Four years into the Great Recession, the financial climate has not been one particularly welcoming to current college students. Already facing prospects of slow job growth, and constantly increasing tuition rates, student loan rates are now set to double on July 1st, going from 3.4% to 6.8%. Unless congress allows for a year-long extension of the loan rate, there is now an ever increasing feeling of panic for those in need of higher education. But now, students are beginning to turn to less financially tumultuous options like community college and universities offering online courses. But, even with these cost-cutting measures be worth it for a student facing thousands of dollars of debt and limited job prospects?
As the Bachelor of Arts degree has taken the place of the High School diploma as the necessary criteria for obtaining gainful employment in the United States, it is clear that higher education remains a necessary investment. But, as tuition rates of private and public universities continue to rise in the face of this possible loan rate hike and a bleak employment market for those with traditional liberal arts educations, conventional universities have begun to see a drop in attendance.
Yet, this drop could be attributed to other factors, namely the rise of alternative methods of earning higher degrees. Students are now turning to the exceedingly more affordable options of community colleges and online programs to further their education instead. Most college students attending these alternative education options have found that the amounts are often less than they would find at traditional public or private universities, paid for in subsidized amounts or financial aid scholarships.
With the average cost of these options up to the $10,000 less than that of public and private universities, community colleges have seen a rise in attendance, and many of these institutions are now offering Bachelor’s degrees in response to the growing demand for affordable four year degrees.
However, one problem persists for many students already employed but are seeking a change of career or attempting to refine their skills for the changing nature of their workplace. While affordable, community college offers classes at times when many students are typically at work, limiting their ability to manage between income and education.
Fortunately, online education has begun to establish itself as a viable and affordable alternative to traditional education and students have found are those that obtaining an Associates, Bachelors, or Master’s degree is all possible online, all while still working part time.
While many still may require loans, some analysts believe that even if congress does not approve the year long extension, the new 6.8% rate may not significantly affect the vast majority of students. Currently, the median debt for a college student is $12,800, while the average stands at $23,300. Only 10% have outstanding loans of $54,000, and 3% of college students owe over $100,000.
While certainly unwanted, these figures indicate that the effects of the rate hike may be less significant than some may fear. The value of a good education remains a constant, and these new, more affordable alternative options are only getting better, so even if congress is unable to come to a deal by July 1st, students will still have many ways to get a degree affordably.